For home-buyers, this couldn’t be a better time. Developers are slashing prices following indications that buyers are returning, reports Naresh Kamath.

For home-buyers, this couldn’t be a better time. Developers are slashing prices following indications that buyers are returning.

“Rates have fallen by up to 40 per cent. If you want a house, it’s time to take the plunge,” said Anuj Puri, chairman and country head, Jones Lang Lasalle Meghraj, a real estate consultancy.

Take the case of Unitech, which constructed the Woodside residential project on Gokhale Road in Dadar. At the launch last month, the flats were priced at Rs 11,000 per sq ft; the prevailing rate was Rs 15,000 per sq ft in Dadar.

Realty experts said rates have fallen to 2006-07 levels. “I don’t think rates will fall further,” said Vibhoo Mehra, CEO of Mumbai Properties, a leading brokerage. “End-users feel they are getting value for money,” said Puri.

Now, other builders are taking a leaf out of Unitech’s book by keeping prices lower than other properties nearby.

Nahar Group, for instance, had an introductory offer of Rs 5,252 per sq ft for two projects at Chandivali. The prevailing price in the area is Rs 6,000 per sq ft. “I’m trying to boost buyers’ confidence in the market,” said Sukhraj Nahar, who heads Nahar Group.

Nirmal Lifestyle has come up with special rates for two projects in Mulund. It priced Citi of Joy at Rs 4,941 per sq ft (the earlier rate was Rs 5,220) and Zircon at Rs 5,121 per sq ft instead of the earlier Rs 5,220. Till recently, new projects in Mulund cost Rs 7,000 per sq ft.

In Parel, the 450-flat Omkar Realty is going at Rs 7,000 per sq ft. It is not a premium project like others in the area, but it’s significantly cheaper than the prevailing price of Rs 10,000 per sq ft.

“We are building budget homes at rates that are 30 per cent lower than other projects,” said Babulal Verma, chairman, Omkar Realty. And the response has been quite good, he added.

Renewed interest in property can also be attributed to public sector banks reducing loan rates. “We disbursed Rs 1,350 crore in home loans within 40 days of reducing rates,” said OP Bhat, chairman and managing director, State Bank of India, which was among the first to reduce loan rates to 8 per cent.

“Our home loans have picked up after the rates were reduced,” said KC Chakrabarti, chairman and managing director, Punjab National Bank.

Rates could fall further on the Reserve Bank of India’s nudging.

Public sector banks charge a floating rate of 8 per cent to 9.75 per cent and a fixed rate of 11.25 per cent to 11.5 per cent for three- to five-year tenures. Private banks charge a floating rate of 9.75 per cent to 11.5 per cent.